Quashing Thoughts Of An Extraction Oil & Gas, Inc. (XOG) Exodus

On 11 January, shares of Extraction Oil & Gas, Inc. (NASDAQ:XOG) closed lower after a volatile session. The shares dropped -0.07 points or -1.44 percent at $4.8 with a light trade volume of 3.287 million shares. After opening the session at $4.81, the shares went as high as $4.96 and as low as $4.67, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $858 million and now has 178.75 million shares outstanding. Extraction Oil & Gas, Inc. (XOG) stock has lost -8.57 percent of market value in 21 trading days.

XOG stock has a trailing 3-year beta of 0, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.31 a share in the trailing twelve months. The stock’s value has surged 11.89 percent year to date (YTD) against a decline of -65.09 percent in 12 month’s time. The company’s shares still trade -72.45 percent away from its 1-year high of $17.42 and 26.65 percent up from 52-week low of $3.79. The average consensus rating on the company is 2.4, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Extraction Oil & Gas, Inc. (XOG) will probably climb 117.08 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $22-month high price target. This represents a whopping 358.33 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $8, which represents a return potential of 66.67 percent when compared to the closing price of the stock of $4.8 on Friday, January 11. The lowest price target for the stock is $5 — slightly more than 4.17 percent from XOG’s current share price.

History has shown that shares in Extraction Oil & Gas, Inc. have gone down on 6 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. Investors will get their next glimpse of XOG’s Q4 earnings on March 18. Analysts are forecasting revenue to climb 27.1 percent to $272M in the fiscal fourth quarter, while earnings are seen soaring by nearly -150 percent to $0.1 per share. It earned $0.43 per share, better than the $0.09, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $282M, better than the $264M analysts expected. Earnings are estimated to increase by 84 percent this year, 87.93 percent next year and continue to increase by 30 percent annually for the next 5 years.

Let’s take a look at some insider activity at Extraction Oil & Gas, Inc. (NASDAQ:XOG) and see the pattern. The earliest insider trade took place on 12/20/2017. Owens Matthew R parted with a total of 400 thousand shares of company at average share price of $14.81. The total for the sales was set at $5.92 million. After this transaction, the President and Director account balance stood at 5.22 million shares. The stock lost -67.59 percent since that insider sale.

The stock is currently hovering around the first support level of $4.66. Below this, the next support is placed in the zone of $4.52. Till the time, the XOG stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 43.02 on daily chart, which may remain a cause for concern. If the price breaks below $4.52 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $4.95 mark may result into a pull-back move towards $5.1 level.

Further, it is sporting a 0.87 on the Price-to-Sales ratio. Compare this with the industry average P/S of 99.85. 81.6 percent is the gross profit margin for Extraction Oil & Gas, Inc. and operating margin sits at 32.8 percent. Along with this, the net profit margin is -2.9 percent.